Re-imagining the future of power in Sub-Saharan Africa - GE
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Re-imagining the future of power in Sub-Saharan Africa
Published May 2019 © 2019, General Electric Company. Proprietary information. All rights reserved.
FOREWARD
A
frica faces a unique challenge – we have an energetic population estimated at over
1 billion1 people yet our household electrification rate is the lowest in the world
with only one in three Sub-Saharan Africans having access to electricity2. To realize
the potential of Africa’s economies with a population projected to increase to 1.7
billion by 2040, access to affordable, reliable and sustainable power is critical.
In collaboration with our customers, GE is leading transformation in the power industry. GE’s
first turbine installation in Sub-Saharan Africa can be traced as far back as the early 1950s
and last year, GE reached its 100th power plant installation in Sub-Sahara Africa. We now
have an installed base of over 300 turbines in 22 countries in the region, adding up to about
80% of the total energy installed in Sub-Saharan Africa.
While we still have a long way to go, progress is visible and many
Governments across the region have plans to substantially
increase installed capacity and electrification in line with the
UN’s Sustainable Development Goal 7 to achieve universal access
to affordable electricity by 20303.
For the first time in 2018, electricity access in Sub-Sahara Africa surpassed the population
growth4. There is hope in achieving universal access to electricity in the 21st century if
countries can diversify their energy mix and design policies that make their energy economies
attractive to financiers.
The global and regional power industry trends are continuously shifting. While these key
themes are part of the power solution in Africa, an essential and skilled workforce, flexible
solutions and the ability to partner together as equipment providers, EPCs, financiers,
investors and governments are critical to success.
There is a great need to find solutions to Africa’s power situation collaboratively through
partnerships between both Government and private investors. We are honored to play a role
in this changing narrative and to be part of the conversation on Powering Africa Forward.
Together, we can accelerate the progress.
Elisee Sezan
CEO Gas Power Sub-Sahara Africa
GE | 3
Re-imagining the future of power in Sub-Saharan Africa 4 | GE
CONTENTS
Foreword ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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Introduction ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫ ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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The Electricity Growth Imperative ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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Energy Transformation in Action ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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The Market Response ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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Positioned to Win ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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The Path Forward ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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References ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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Acknowledgements ⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫⚫
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GE | 5
Re-imagining the future of power in Sub-Saharan Africa INTRODUCTION Currently at 64GW, the region’s power generation capacity is projected to grow at 4% each year across the various fuel sources to help meet the energy demand of the growing African population. The region’s current energy mix, primarily dominated by hydro and coal, is becoming more diversified following the rising interest in renewable technologies such as solar and wind. Key themes in the regional energy transformation are centered on the 3Ds; Decarbonization, Decentralization and Digitization. On decarbonization, efforts to reduce greenhouse gas emissions have influenced the preference for wind, solar, geothermal and hydro as part of a more environmentally friendly energy mix. To ensure power generation reaches the populations that need it most, Sub-Saharan Africa’s grid needs development. It is estimated to be unavailable, on average, only 6% of the time18. Hence, the drive for a more decentralized power system to support affordable distributed power technologies. Under digitization, technology is seen as a primary driver of efficient energy supply with internet enabled solutions such as smart grids and automated metering. Sub-Saharan Africa needs power and there is an overdependence on governments to resolve this crisis. Governments are further challenged with the task of providing affordable and reliable power in a timely manner. With funding from non-governmental organizations (NGO), financial institutions and partnerships with private investors and independent power producers (IPP), the current narrative that two out of three people in the region needs access to electricity is expected to change. Current projections are that IPPs and public-private partnerships (PPP) will account for 35% of the region’s installed capacity, excluding South Africa, by 2020. 6 | GE
THE ELECTRICITY GROWTH IMPERATIVE
Since 2010, power capacity in Sub-Saharan concentration of access gains has been in
Africai has increased by 40% from 85GW to Kenya, Ethiopia, Tanzania and Nigeria, 8 with
119GWii, with the last five years producing Ghana and South Africa recording the highest
double digit growth in capacity additions 5. access rates in the region. As a further
Across the region, the energy mix has example, Ghana and Botswana have benefited
historically been dominated by hydro, except in from an over 50% increase in access since
South Africa, where coal remains a major 1990, but high population growth countries 9
source of power generation. The generation such as Uganda and the Democratic Republic
mix has gradually begun to diversify with an of Congo have achieved less than an 18%
increased presence of gas, diesel, and increase in access since 1990 10.
renewables. Gas power generation capacity
has almost tripled since 2010. Of greater note Beyond powering homes and industry, further
is the emergence of wind and solar, having efforts are required to develop access to clean
grown from 50MW in 2010 to a capacity of cooking fuels. As of 2017, less than 20% of the
nearly 5GW in 2017. Critical factors that have population had access to clean cooking fuels 4.
impacted the energy mix are increased
incentive to utilize domestic fuel sources, skills Sub-Saharan Africa presents a vibrant and
development priorities for local workforce, and complex landscape across which to consider
environmental events. the impact of the global electricity system
transformation. This report will explore the
Power generation capacity in Africa is forecast relevance and impact of key global electricity
to grow at about 4% per year through 2040 to sector transformations on Sub-Saharan Africa.
peak at 570GWiii. Our expectation is that
generation will continue to increase across all
fuel sources, with a majority share of new
additions being powered by gas and renewable
generation technologies.
The power capacity growth prospect is
promising, however, the need to keep pace
with the continent’s growing population is
cause for urgency. Africa is projected to be
home to 1.7 billion people by 2030, which will
be a nearly 40% increase over population levels
in 20156. While progress in electrification has
been made, less than half (43%) of the sub-
continents’ population still does not have
access to electricity7. Progress has also not
been evenly distributed. The highest
i Country groupings are as follows: Sub-Saharan Africa includes Angola, Benin, Botswana, Cameroon, Republic of the Congo, Côte d’Ivoire, Democratic Republic of the Congo, Eritrea, Ethiopia, Gabon,
Ghana, Kenya, Mauritius, Mozambique, Namibia, Niger, Nigeria, Senegal, South Africa, South Sudan, Sudan, United Republic of T anzania, Togo, Zambia, Zimbabwe and other countries and territories.
North Africa include Algeria, Egypt, Libya, Morocco and Tunisia. Where the content refers Africa, it includes North Africa and sub-Saharan Africa regional groupings.
ii Calculated based on operational units.
iii
Based on Current Policies Scenario figures from World Energy Outlook 2018. Includes North Africa and sub-Saharan Africa regional groupings.
GE | 7
Re-imagining the future of power in Sub-Saharan Africa ENERGY TRANSFORMATION IN ACTION Decarbonization The need to reduce greenhouse gases is a priority for the energy ecosystem. Global carbon emissions from fossil fuels increased by 1.2% in 2017 11. Progressive use of cleaner energy sources such as gas and the development of new technologies harnessing digitization will eventually lead to the further decarbonization of the economy. The immense renewables potential for Sub-Saharan Africa presents opportunities for meeting the region’s energy needs with abundant unlimited energy. Decarbonization can be achieved through a diversified, environmentally friendly power generation mix including wind, solar, geothermal and hydro. The decarbonization of electricity is well underway as demonstrated through the rapid uptake of renewable energy technologies across the world and falling renewable power generation costs 12. Kenya, Ethiopia, Tanzania, South Africa and Nigeria, have in the last five years increased their adoption of affordable renewable energy and distributed technologies. Across the region, renewable energy has provided 34% of new connections since 2012, and off-grid and mini-grid systems, 6%14. The move to add renewable resources in Sub-Saharan Africa’s energy mix signals the start of the process of decarbonization - reducing the carbon-intensity of the electricity we use. There is, however, the need for Sub-Saharan Africa countries to create policies and frameworks to promote renewable energy solutions. Renewable technology adoption will continue to grow and by 2030, account for over 60% of new access globally 13. GE is committed to technologies that support decarbonization and a balanced energy mix. A balanced energy mix will be critical to delivering affordable and reliable power and ensuring environmental sustainability. Wind Wind presents an ideal source of energy for markets seeking an independent fuel source. However, reforms are required to implement appropriate policy frameworks to reduce capital costs associated with wind power generation and make it an attractive investment option for IPPs. 8 | GE
Solar Geothermal
Globally, the cost of solar photovoltaic (PV) Africa has a total installed geothermal
modules has decreased since 2009. Between generating capacity of over 644 MW. The
2010 and 2017, the cost of electricity from geothermal capacity for the East Africa region
solar PV was lower by almost three-quarters is estimated to exceed 15,000 MW,
and is expected to continue to decline. representing a $40 billion investment
Although solar irradiation in Africa is one of the opportunity.17 Geothermal is an appropriate
highest levels globally, the installed capacity in technology to meet base load energy demand
Africa for solar is around 2GW, representing but the high initial financing costs and
less than 1% of the world’s solar capacity. In exploration risks have made it a challenge for
Sub-Saharan Africa, a majority of areas countries to increase capacity12.
experience in excess of 2000 kWh of solar
radiation annually. Solar is compatible with Gas
micro-grid technologies for areas that do not Gas is positioned as a differentiator in
have access to the grid. Solar power will increasing electrification access rates in Sub-
experience increased orders in the future Saharan Africa. Currently, natural gas is
fueled by cost reductions and business models predominant in Nigeria, Cote D’Ivoire, Tanzania,
that make it more affordable than grid. Solar Ghana and Mozambique26. Nigeria leads proven
solutions offer an attractive opportunity as reserves at 5.3 trillion cubic metres 25. Angola,
accessibility, affordability, reliability and Equatorial Guinea, Nigeria and Cameroon are
efficiency are key variables to consider in terms key exporters of LNG. Gas complements
of energy security in Africa. renewable technologies such as wind and solar
and could potentially replace oil which is used
Hydro for power generation in most countries
Africa has an estimated hydropower capacity resulting in expensive electricity 25. There is the
of 300 GW, but only 8% of this is currently possibility of increasing regional trade from
utilized14, representing 84% of all non-fossil countries with gas. Currently, Mozambique
fuel energy use15. The Grand Ethiopian exports gas to South Africa and Nigeria exports
Renaissance Dam in Ethiopia is expected to gas to Ghana, Togo and Benin 25. There is
produce 6,000 MW once construction is potential for LNG import projects in Ghana,
complete. Hydropower accounts for over 50% Cote D’Ivoire, Namibia, Madagascar, Mauritius,
of electricity generation in several countries South Africa and Kenya 25.
including Uganda, Namibia, Zambia,
Democratic Republic of Congo, Ethiopia, Togo
and Mozambique23. There is, however, the need
to invest in storage systems to manage
intermittency, especially due to climate events
such as drought. To enable flexibility,
hydroelectric pumped storage systems will
continue to be important across the region 24.
GE | 9Re-imagining the future of power in Sub-Saharan Africa
Digitization competitive. The region’s largely unbanked
The broad spectrum of Internet of Things (IOT) population has accelerated the adoption of
solutions help manage data and systems. alternative financial services, led primarily by
While IOT adoption in Sub-Saharan Africa is mobile network operators. Sub-Saharan Africa
relatively new compared to other emerging enjoys an impressive mobile money economy,
markets, one should not underestimate the with experts projecting a shift from its heavy
transformative potential of these technologies. cash economy to a digital ecosystem in the
As governments focus on increasing energy long term. With half of the region’s population
access and utilities work to reduce unable to access affordable, reliable power,
transmission losses, the role of technology in and fewer than 50% of adults have an account
driving overall efficiency of the region’s energy with a formal financial institution, Sub-Saharan
economy cannot be emphasized enough. The Africa presents the perfect opportunity for
proliferation of internet enabled solutions such affordable renewable energy, distributed
as smart grids, renewable energy integration, technologies and innovative financing models.
and automated metering are enhancing energy
delivery optimization, particularly in South An increase in the adoption of solar
Africa and Kenya, where smart metering is technology, largely driven by a fall in prices and
reducing domestic and commercial the shift from peer to peer lending to the
consumption, increasing revenue collection widespread use of mobile money technology
rates and improving operational efficiency. have led to new business models that are
Across the region, systems integration and addressing these two challenges. In Kenya, M-
controls remain critical for power generation, Pesa, a platform that offers retail financial
transmission and distribution. But perhaps, the services via mobile phones, has enabled
most fundamental role of technology in companies that provide rent-to-own solar
advancing the region’s energy sector will be in energy solutions for the off-grid population
these areas: through access to mobile money payments.
These new solutions are decentralizing the
• Baseline analysis of projected power finance and energy traditionally provided by
demand large commercial banks and central utilities.
• Customer behavior insights: consumption, The portable solar lanterns and solar home
purchasing and payment patterns systems power multiple lights, mobile phones
• Improved customer experience through and small appliances, allowing populations that
better kilowatt delivery are not connected to central grid to have
• Smart grids that increase grid flexibility by access to affordable and reliable power for
ensuring interoperability of diverse power their homes and small businesses.
generating assets
Leveraging emerging technologies will drive the
innovation and advancement needed around
utility scale transformation and make
generation and distribution costs more
10 | GEAt the core of these innovations, blockchain is decade, with sales of household size units
a decentralized software mechanism that estimated at over 10 million. Given the cost per
enables a public distributed ledger system. In connection for centralized grid expansion, off-
recent times, it has emerged as a tool for the grid electrification provides a feasible and cost-
under-served finance segments. In Sub- effective method to connect rural populations
Saharan Africa, it is still a nascent technology for many markets in Sub-Saharan Africa20.
that has been embraced by early adopters
mostly in East and South Africa. Nearly all Sub-Saharan Africa’s state-owned
power utilities face operational, structural, and
Decentralization financial challenges. In light of this, a critical
Globally, the power landscape has been question to be addressed is how decentralized
transformed by the arrival of increasingly power regulation can most effectively be
affordable distributed power technologies. deployed such that it encourages private
With diverse fuel options and flexible investment and reduces government
configurations, these technologies have been a dependency, as well as also implementing the
key driver in the trend towards smaller, necessary reforms to remediate the issues
decentralized power systems. within the centralized utilities.
The traditional centralized grid infrastructure, While decentralized power technologies do not
which only extends access to urban produce significant generation output, the
populations, faces significant issues with primary benefit of distributed solutions is their
reliability and in most cases requires ability to accelerate access to the population,
rehabilitation due to age and poor when compared to traditional grid
maintenance. infrastructure.
Achieving universal access in Sub-Saharan Given that the largest consumers of power are
Africa will require significant capital concentrated urban centers and industrial
investment, particularly if traditional users, decentralization will have minimal
centralized grid infrastructure is developed. An impact on centralized generation. Rather the
estimated $265 billion is required for most significant impact will be
distribution infrastructure development and socioeconomical as a result of the achievement
$80 billion for transmission infrastructure of electrification targets.
development by 2040 19. Many African markets
have adopted off-grid distributed power
options as a way to more affordably address
the electrification challenge. Global cost
reductions in PV and battery storage, as well as
regional business model innovation in mobile
money have enabled off-grid solutions to grow
in prominence over the last few years. Solar
technologies have grown in access in the last
GE | 11Re-imagining the future of power in Sub-Saharan Africa
THE MARKET RESPONSE
Sub-Saharan Africa has one of the world’s Southern Africa matched a $100 million fund
lowest electrification access rates. Global extended to it by the UN's Green Climate Fund
programs like the United Nation’s Sustainable (GCF) to support the development of micro-grid
Energy for All (SEforALL), the United States’ projects. The $200 million investment will add
Power Africa and the German Marshall Plan for 330MW of new generation capacity and reduce
Africa, are helping increase electricity access. more than 700,000 tons of carbon dioxide per
The slow rate of power sector development, year.
spotty governance and increasing population
numbers counter the impact of these initiatives The breadth of financing resources for Sub-
and amplify the region’s energy poverty. Saharan Africa’s energy infrastructure is a mix
of domestic funding by governments (budget
Financing and Regulatory Framework allocation) and external funding in the form of
IPPs and PPPs have become an integral part of multilateral institutions like the World Bank
the region’s energy economy. In Sub-Saharan Group (WBG), African Development Bank
Africa, excluding South Africa, IPPs and PPPs will (AfDB), government to government agreements,
generate 35% of installed capacity by 2020 32. public-private Initiatives and OECD-DAC donors.
The IPP model, now the primary vehicle for African governments recognize the challenges
investment in the region’s energy sector is of energy deficits and have continued to
expected to grow in reach and beyond its increase the domestic budget for power
current concentration. infrastructure financing.
Uganda, Kenya, Namibia, Senegal, Ghana and
South Africa have clear policies around private
sector participation in their energy economy.
Transparent and credible regulatory oversight,
dynamic power sector planning and committed
and experienced equity partners further enable
IPP participation in these economies. 14 IPPs in
Namibia recently committed to investing $111.7
million to add 70MW of capacity to the national
grid, reducing the country’s reliance on imports
from the Southern Africa Power Pool (SAPP)27.
In March 2019, the Development Bank of
12 | GEEnergy Sector Management Driving an era of cost reflective tariffs in
Two factors that determine the viability of the markets where citizens have not had access to
region’s energy sector are financial reliable energy will be transformative. Targeted
sustainability of utilities and tariff affordability. tariff increases to customers who need reliable
Improving operational efficiencies by reducing power and can afford it is a solution to large
combined transmission, distribution and bill utility deficits and low access rates. Most Sub-
collection losses as a percentage of dispatched Saharan African countries have suppressed
electricity are key to closing the revenue loss power demand. The lack of cost reflective tariffs
gap. Pre-paid metering systems align electricity makes it difficult to drive better international
payments with income flow and improve the and private sector participation in the energy
rate of payment to utilities. economy model.
Electricity access and consumption cannot be Despite an abundance of capital, financiers are
improved if utilities continue to struggle with frustrated by the lack of well-structured
operational efficiencies as is the case in many of projects, especially for transmission and
the countries in the region. Ghana, in February distribution, that support attractive rates of
2019, transitioned management of its utility to return available across the region. The region
a consortium led by the Manila Electricity could improve future project economics and
Company (Meralco). The new entity, Power attract a wider range of investors, including
Distribution Services (PDS) Ghana Limited will private offices, sovereign wealth funds and
undertake reforms and projects that will individuals worldwide, through effective power
address the inefficiencies in the country’s power sector reform and the reduction of
sector, making it a more investor-attractive inefficiencies in the energy value chain. Ideally,
market. the region aspires to achieve an energy
economy that balances investment,
Power sector subsidies in the region are affordability, access and reliability.
substantial and regressive although politically
expedient in most African countries. Subsidies
are challenging to eliminate once implemented
and the dependence on government to provide
affordable power is a disadvantage for the
region’s energy economy.
GE | 13Re-imagining the future of power in Sub-Saharan Africa POSITIONED TO WIN GE’s Hybrid Distributed Power Unit Powers Digo Village Ethiopia has abundant renewable energy resources and the potential to generate over 60,000 megawatts (MW) of electric power from hydro, wind, solar and geothermal sources 22. The Grand Ethiopian Renaissance Dam (GERD), which is currently under construction, is expected to be the largest hydroelectric dam in Africa and to generate 6,450 MW of electricity at full capacity. In 2018, the Federal Government of Ethiopia launched the National Electrification Program (NEP), a comprehensive plan to reach universal access to electricity by 2025. Ethiopia is the second-most populous country in Africa and with a population spread out throughout the country, therefore ideal electrification solutions must be both on-grid and off-grid. The GE off-grid hybrid power system is ideal for remote villages and hard-to-reach operations but can also provide increased reliability when grid supply is inadequate. In Ethiopia, the scalable micro grid system powered by a Hybrid Distributed Power unit provides reliable, sustainable and cost-effective power to 1,500 inhabitants of Digo Village, powering a health clinic, school, administrative offices and homes. GE’s Hybrid Distributed Power combines PV solar panels, batteries, and a diesel generator to provide reliable, cost effective power to a mini-grid system. GE’s Predix platform, designed for digital industrial IOT, maximizes the use of clean solar power and batteries for the unit. This pioneering technology proactively troubleshoots issues with any system before they become a problem for customers. The variable speed diesel generator provides essential backup when battery power is insufficient. The entire system is containerized inside a standard shipping container that can be efficiently and speedily installed. The Digo village Hybrid power system is GE’s third installation in Ethiopia and the second in Sub- Saharan Africa. In 2017, GE funded two similar units in Ethiopia at Health Centers in Guba and Ashoka in Southern Nations, Nationalities, and Peoples’ Region (SNNPR) region. In the Democratic Republic of Congo, the hybrid distributed power system will provide power for small businesses, schools and other organizations in Goma. 14 | GE
GE Power’s Software Technology Transforming Botswana’s Grid Network
The Government of Botswana, through the National Energy Policy, has set a national electricity access
target of 100% by 2030 29. The country aims to increase access to affordable, safe, reliable, adequate
and more sustainable power for both rural and urban populations. An efficient process from
generation to consumption of power requires a stable transmission and distribution system that is
sustainable in the long term to ensure supply security. Electricity transmission and distribution
systems that are aged can be transformed through digital technologies to drive efficiency. A smart
grid ensures increased efficiency, affordability and reliability of electricity to consumers by minimizing
losses in distribution and reducing power interruptions. The technology anticipates problems before
they occur and if they do occur, smart grid management systems analyze maintenance requirements
and re-routes power to minimize the outage. Through data analyses, GE service engineers can attend
to the issue quickly and effectively.
To improve grid efficiency, GE is working with the Botswana Power Corporation (BPC) to design,
supply, install, test and commission a SCADA/Energy Management system at the principal grid control
centers in BPC’s headquarters in Gaborone and the back-up control center in Francistown. The
system will lead to a more optimized, dependable and responsive grid network by reducing down -
time and improving revenue collection. BPC will also benefit from a single platform for both Gaborone
and Francistown thereby increasing efficiency.
The benefits of a smart grid solution include demand response and demand side management,
increased grid flexibility, integration of diverse generating assets, preventive maintenance and
increased interoperability. Smart grid solutions also improve resilience to cyber-attacks on the grid 30.
Trends such as renewable energy integration, automated metering, grid decentralization and growth
in distributed generation will drive the need for smarter solutions in future 31.
GE | 15Re-imagining the future of power in Sub-Saharan Africa A Regional Commercial Bank Finances Off-Grid Energy Access Across Africa Sub-Saharan Africa’s existing grid faces availability challenges leaving many remote communities unserved. However, governments have little appetite or the balance sheet to support the development and maintenance of backbone infrastructure. With reduced technology costs, enhanced storage efficiencies and increasing tariffs, off-grid (mini- grids and solar home systems) solutions have never been a more attractive solution. An Africa focused, client-centered regional banking institution is bringing safe, reliable and affordable power to large unserved communities across the region, with several success stories in Kenya, Namibia and Uganda. Through its partnership with leading off-grid pay-as-you-go energy companies, the bank is providing financial solutions for solar asset investments. Solar panels (customizable per customer needs) are mounted on roof tops in both rural and affluent communities, and payments made in installments via the pay-as-you-go model. Since 2017, the bank has committed over $80 million of funding to pay-as-you-go companies in East Africa, effectively disrupting the market for financing off-grid renewable solutions and remains committed to accelerating Africa’s growth trajectory through increased investment and growth in the solar home systems market. The current model presents some challenges and the bank, and its partners recognize this. The plan over the next few months is to design a customer intelligence system that drives sophisticated data collection and can influence baseline analyses of customer behavior patterns (consumption and payment habits). With the intelligence gathered, the bank and its partners can project future demand, design a credit scoring system based on customer purchasing behavior and improve customer experience through better kilowatt delivery. With a system like this in place, the bank can amplify its financing solutions for solar home systems as part of new home purchases beyond South Africa. 16 | GE
THE PATH FORWARD
The challenge for most Sub-Saharan African countries is improving electricity access for their
growing populations and the scale of the electrification challenge means no single fuel can solve this
problem. The energy mix will shift from the traditional hydro and coal to accommodate renewables
and gas. The timescale for development of renewables energy infrastructure means gas has a large
window of opportunity to become the preferred fuel source in the short and medium term. Nigeria,
Angola, Tanzania, Mozambique and Senegal have large enough gas reserves for export to
neighboring countries. Since 2010, GE’s Gas Power Systems business has added 6GW to the grid in
Sub-Saharan Africa and delivered the best performing products and solutions portfolio across the
region. With over 120 years of experience in the energy business, GE covers the entire plant
spectrum with its world-class gas and steam turbines, generators, condensers and digital solutions .
Through strategic partnerships with governments and key energy sector stakeholders GE
equipment, total plant design, integration and execution capability is producing both reliable
baseload and flexible emergency power solutions across the sub-region.
Key success stories across the region include:
• 70% of Ghana’s thermal power runs on GE equipment. GE has added over 600MW of power to
the country’s grid with plans to develop additional 900MW in the next two years; the 400MW
Bridge Power project will be the first LPG-fired power plant in Africa and the largest LPG fired
power plant in the world. The Atuabo Waste to power IPP will be the first TM2500 plant to use
otherwise flared isopentane gas as a fuel source. The Cenpower IPP financed by the AFC will
achieve commercial operation in 2018 and will bring online 350MW of power – enough electricity
to power over two million Ghanaian homes – - and the 200MW Amandi power plant which will
come online in 2019 will run on GE’s latest and greatest 9E technology offering superior fuel
flexibility for the country.
• 3GW+ of GE heavy duty and fuel-flexible gas turbines have been committed to meet Nigeria’s
power generation ambitions.
• 80% of Angola’s gas-powered generation runs on GE technology bringing electricity access to
approximately 2 million Angolan households. The Soyo 1 combined cycle power plant will
produce up to 750MW of electricity upon completion. In addition, over 20 units of GE’s innovative
trailer mounted gas turbines are installed on the Angolan grid, bringing fast and efficient
electricity access to remote communities.
• In Cote d’Ivoire, the Azito power plant, one of the first ever combined-cycle power plants in the
country, produces more than one-third of the country’s electricity and runs on GE technology.
The first ever gas turbines and the first IPP project also run mainly on GE technology.
Technology and skills transfer are at the core of the work GE does in countries across the
region. Our existing projects have achieved up to 70% of local content and three times more
jobs created in the countries we operate. GE has delivered on programs for supplier
development, and scholarships and internships for engineering students, with special focus
on female engineers. We support collective advocacy and a regional approach to the sub-
region’s energy challenges.
GE | 17Re-imagining the future of power in Sub-Saharan Africa
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18 | GEACKNOWLEDGEMENTS
GE extends its appreciation to our customers and partners for their participation and valuable
contributions to the thought leadership workshops and research for this report.
GE | 19GE Power is a world leader in power generation with deep domain expertise to help customers deliver electricity from a wide spectrum of fuel sources. We are transforming the electricity industry with the digital power plant, the world’s largest and most efficient gas turbine, full balance of plant, upgrade and service solutions as well as our data-leveraging software. Our innovative technologies and digital offerings help make power more affordable, reliable, accessible and sustainable. Learn more at: https://www.ge.com/power/regions/africa
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